Health-care costs, not new iPhones, are the reason you’re broke

Republican Rep. Jason Chaffetz provoked an outcry after saying that, under the GOP’s proposed health-care plan, poorer Americans could somehow afford insurance by choosing to forgo new iPhones.

“Americans have choices. And they’ve got to make a choice. So maybe, rather than getting that new iPhone that they just love and they want to go spend hundreds of dollars on, maybe they should invest that in health care,” Chaffetz said Tuesday. “They’ve got to make those decisions themselves.”

Republican Rep. Jason Chaffetz provoked an outcry after saying that, under the GOP’s proposed health-care plan, poorer Americans could somehow afford insurance by choosing to forgo new iPhones.

“Americans have choices. And they’ve got to make a choice. So maybe, rather than getting that new iPhone that they just love and they want to go spend hundreds of dollars on, maybe they should invest that in health care,” Chaffetz said Tuesday. “They’ve got to make those decisions themselves.”

His comment came off to many like a high-tech twist on what self-made millionaire David Bach calls “The Latte Factor,” the notion that many people are broke because they spend too much on trivialities like coffee.

Other experts, however, point out that the real reason so many Americans are financially insecure isn’t because companies like Starbucks and Apple seduce them into spending more than they should on small luxuries. Rather it’s because wages are stagnant, and the cost of necessities such as rent, student loans and, of course, health care are increasing.

Twitter users were quick to explain that the kind of Americans who qualify for the Medicaid expansion are not the ones dreaming about the iPhone 7. And while smartphones may cost a lot, medical care in America is expensive on a whole different scale.

It is true that Americans, especially young ones, spend a lot of money on their smartphones, perhaps even more than many of them can comfortably afford.

The average millennial has less than $1,000 in a savings account. Even 33 percent of older millennials, ages 25-34, have nothing saved at all. Yet, between the hardware and the monthly plan, smartphones can cost users about $1,000 a year, and 85 percent of millennials have one. Nielson reports that “these young consumers are the largest segment of smartphone owners.”

The costs associated with your smartphone may indeed be part of the reason you aren’t able to save much for the future. They’re still insignificant in comparison to the costs associated with health care.

By 2016, annual average health-care costs had spiked to over $10,000 per person and $25,000 for families of four. That’s about half the median household income in 2016 ($56,000). And that’s for people fortunate enough to have coverage.

Compared to that, as Twitter users were also quick to point out, a phone really is about as big a deal as an occasional latte.

While young people could indeed figure out ways to be smarter about their smartphones — by switching to cheaper monthly plans and upgrading to new models less often, for example — the onus is still on Congress to help all Americans figure out how to afford health care without going bankrupt. Otherwise, even if millennials can figure out how to save for retirement, many of them won’t live long enough to enjoy it.

Virtual-reality system for the elderly wins health care prize

Critics have long faulted U.S. medical education for being hidebound, imperious and out of touch with modern health-care needs. The core structure of medical school—two years of basic science followed by two years of clinical work—has been in place since 1910.

Now a wave of innovation is sweeping through medical schools, much of it aimed at producing young doctors who are better prepared to meet the demands of the nation’s changing health-care system.

Virtual reality is quickly gaining steam in the gaming industry. But an MIT startup is now aiming the technology at a different demographic, putting it to use as a health care tool for the elderly.

At last night’s MIT Sloan Healthcare Innovations Prize pitch competition, Rendever earned the $25,000 grand prize for creating a virtual-reality platform that gives residents in assisted-living facilities the chance to explore the world virtually. The platform also provides cognitive therapy and tracks movement data to aid in early diagnosis of dementia.

“We’re using virtual reality to improve the way we age, so you don’t become isolated, don’t become depressed, and you can keep your mind happy and healthy,” said Rendever co-founder and CEO Dennis Lally, an MIT Sloan School of Management student who launched the startup with classmate Reed Hayes.

Rendever was one of eight finalist teams — winnowed down from 50 applicants — to pitch health care innovation ideas to a panel of expert judges and a capacity audience last night at the MIT Wong Auditorium in the Tang Center. The competition, part of the 14th annual MIT Sloan Healthcare and BioInnovations Conference (being held today in the MIT Media Lab), is organized by the student-run MIT Sloan Healthcare Club to promote innovation and entrepreneurship in the health care space.

A second-place prize of $4,000 went to Need-a-Knee, a team of MIT mechanical engineering undergraduates developing an inexpensive leg prosthetic that allows users to sit cross-legged — an important part of culture in countries such as India, where current models don’t allow for such flexibility.

Day Zero Diagnostics, a team from the Harvard-MIT Health Sciences and Technology program, earned a $1,000 audience-choice prize for developing a diagnostic tool that makes the detection of specific bacterial infection in hospitals much faster, reducing wait times from days to hours.

Other competing teams were: CareMobile Transportation, an Uber-like medical-transportation startup that employs social workers to transport and care for people with disabilities; Manus Robotics, a wearable robotic gripper that helps stroke survivors with impaired hand functions; Patients Like This, an analytics tool that improves mental health patient outcomes by using electronic health record data; Neurosleeve, a computerized glove that measures electrical function of nerves in the hand to diagnose carpal tunnel syndrome and other conditions; and #1, a wearable device and app system that treats urinary incontinence by tracking pelvic muscle training and measuring moisture associated with incontinence.

Socializing, therapy, and diagnostics

In the team’s winning pitch, Rendever said its system includes multiple virtual-reality headsets, custom software, and a tablet. The software syncs headsets together, so users can join together in a virtual world, visiting childhood homes, exotic locales, sports games, or a relative’s wedding across the world. The headsets can be controlled simultaneously by caregivers, using the tablet. All content is also custom-made by Rendever, based on 20 million gigabytes of content mined from the internet.

Apart from providing a socializing tool, the system can double as a form of reminiscence therapy, which involves discussing past experiences, with aid of photographs, familiar items, and music — or virtual cues, in the case of Rendever.

According to trial studies, Rendever’s system has increased overall resident happiness at the Brookdale Senior Living Community in Massachusetts by 40 percent, Lally said. The startup is currently working with the MIT AgeLab to validate those statistics.

Rendever also hopes to leverage virtual-reality data to aid in diagnosing dementia, which currently relies on qualitative studies and expert opinion. “We’re creating a data-driven [diagnostics] solution,” Lally said.

Users are asked to work through real-life simulations, such as making dinner, completing a series of tasks. In the process, Rendever’s software collects thousands of data points per minute on movement, reaction time, and executive function. All this can lead to earlier interventions for dementia patients and help measure the efficacy of treatments.

“We can track very precisely how someone moves through this space, and what they were doing,” Hayes, Rendever’s chief operations officer, told MIT News. “We also built a machine-learning model that’s currently being trained to help find patterns [characteristic of] someone who has early-stage dementia versus someone of healthy mind.”

Rendever’s prize money will help fund research and development, with a second trial study kicking off soon. Hayes attributes the team’s win to tapping into an underserved need. “Everyone has a parent or grandparent who’s getting older … and not much can be done when they can’t leave the house,” he said. “The solution we built is a fun way for them to re-experience the world again, to be explorers. We’re bringing that to a demographic that has lost the ability [to explore].”

Last year, Rendever entered the pitch competition — its first entrepreneurship contest ever — and made it to the semifinals round. By refining the business and technology through MIT classes at the Martin Trust Center for MIT Entrepreneurship — under the watchful eye of managing director Bill Aulet — the team came out on top, Reed said. “It’s this awesome story for us to come back [to the competition] and win,” he said.

Pushing ideas forward

There were only three prizewinners last night. But MIT Sloan student Maddie Thoms, co-president of the MIT Sloan Healthcare Club that organized the competition, said the aim is to help all the entrepreneurs further refine their ventures. “It’s not just about one or two teams walking away with a good prize. We’re hoping to push a bunch of teams forward in their endeavors,” she said.

In the weeks leading up to the pitch competition, teams were offered mentorship, networking opportunities, and a one-day workshop on developing business pitches. The competition consisted of two semifinal rounds, where judges provided further coaching.

Teams were each required to have at least one MIT or Harvard University student. Criteria for choosing competing teams included determining the novelty of the invention, its technical feasibility, any hurdles in governmental and other regulations, and whether the team has acquired customers or made its first sale.

With the competition, organizers also hope to strengthen the health care community at MIT, in neighboring Kendall Square, and across Boston by fostering connections between teams, judges, and local mentors and investors. Thoms said that networking helps “get the right ideas connected with the right people, ventures, or partner companies.”

Competing amongst similar startups helped second-place team Need-a-Knee solidify a business plan, said team member Matthew Cavuto, a mechanical engineering student and a 2017 Marshall Scholar. The team built a rotating disc with a simple push-button spring-pin mechanism at the knee joint of a low-cost prosthetic. Pushing a button on the disc releases a pin inside, which lets users rotate the disc and snap it into place at an angle to sit cross-legged. In India, for instance, people sit this way for praying, eating, and other activities, but current inexpensive prosthetics aren’t designed for the position.

Most engineering for the prosthetic was completed in one semester, Cavuto said, and the competition helped demonstrate how major global problems can be tackled quickly. “There are real needs that can be solved in a fairly short amount of time in the developing world, and there’s a big market … that’s not usually seen here in the United States,” he said. The team’s $4,000 prize money will go toward International Organization for Standardization testing, which will certify it for safety and compatibility with humans.

Transforming Healthcare: Three Trends Shaping The Industry

Critics have long faulted U.S. medical education for being hidebound, imperious and out of touch with modern health-care needs. The core structure of medical school—two years of basic science followed by two years of clinical work—has been in place since 1910.

Now a wave of innovation is sweeping through medical schools, much of it aimed at producing young doctors who are better prepared to meet the demands of the nation’s changing health-care system.

With increased patient volumes and fewer staff members, rapid scientific progress, growing consumerism, and increasingly outcome-oriented compensation models, the environment for healthcare providers around the world is changing. These challenges drive healthcare providers to rethink their business approaches and seek new solutions to lower costs. On the way of answering the question how to control risk and meet demands while continuing to provide quality of care, three trends are emerging: consolidation, standardization, and managing health.

Consolidation

The creation of larger affiliated entities, such as Integrated Delivery Networks (IDNs), are proving to offer advantages and enable sustainability. There are two main reasons for consolidation: The changes of reimbursement models and their accompanying financial challenges like we see in the USA and the rapidly growing healthcare sector in emerging markets with huge potential for investors.

Few healthcare providers have the necessary financial resources and organizational prerequisites to navigate the transformation of the healthcare industry on their own. Mergers and acquisitions are increasing, and the consolidation trend will gather even more momentum in the coming years. In addition, other kinds of business combinations between healthcare providers, such as joint ventures, strategic partnerships, and cooperation arrangements, are becoming more common.

This leads to the creation of large healthcare networks, hospital and laboratory chains that increasingly resemble corporations, many of which have elevated their operations to an international dimension. Such “XXL-sized healthcare providers” intend to attain competitive advantages on the strength of a broader or deeper offering of specialized services, as well as cost savings resulting from synergies and economies of scale.

These developments will reshape the hospital landscape in industrialized countries, leading to new giants with several billion dollars in annual revenue. For example, the consulting firm Deloitte estimates that, by the end of the current consolidation phase, only around half of the current health systems in the U.S. will remain.

Emerging markets are also experiencing a growing number of hospital mergers and acquisitions. The underlying reasons are different, however. Foreign and domestic investors, as well as hospital operators, invest in India or China because of their high growth potential. They are bringing successful models to new geographies.

Standardization

Taking advantage of the standardization that other industries have capitalized upon can help drive common processes, reduce unintended variability, and ensure consistency in results.

Among the levers for optimization, addressing staff shortage and overcoming operational inefficiencies are key success factors for staying competitive.

Addressing staff shortages can be managed by increasing workforce productivity and optimizing employee satisfaction: Automation, for instance, reduces the manual workload involved in setting up or evaluating clinical protocols. Doctors and nurses spend less time on administrative tasks, which reduces loss of information and frictional losses. In addition, targeted training enables a more flexible use of staff – a key aspect of business management. The flexible deployment of staff also increases employee satisfaction as their tasks become more varied. Additionally, modern information management is crucial for the speed and accuracy of care decisions.

Avoiding operational inefficiencies: There is a close connection between the workforce topic and the effects on patient throughput, wait times, and return on investment. This is exactly where digital fleet management portals can help. By closely monitoring medical equipment, these systems help to detect workflow problems, facilitate maintenance as well as investment planning, and thus could reduce inefficient underuse of costly devices.

Managing Health

The trend towards comprehensive health management is likewise motivated by the need to lower costs. Population health management – health management of entire population groups – is of growing importance. It involves the stratification of patients into well-defined risk groups and the creation of differential care strategies based on the group’s needs. In general, the idea is to heal patients as quickly as possible and stabilize patients with chronic diseases by means of high-quality treatment and seamlessly coordinated care. Most of all, however, health management aims to prevent people from becoming ill in the first place.

While in the past, the pure provision of a medical exam, diagnostic or a therapeutic procedure was justifying reimbursement (fee-for-service), increasingly, reimbursement is being tied to the achieved outcome (fee-for-value). Today, cost bearers define quality standards and measure them while healthcare providers receive a bonus for success, and a penalty for non-performance.

The transition to a value-based healthcare system requires fundamental changes to the business model and IT infrastructure as well as close collaboration of different stakeholders such as providers, payers, and patients. Healthcare providers are increasingly relying on complex data analytics as well as transparent and complete information – to ensure consistent high-quality and high-value care, while reducing the need for high-cost medical services.

Expectations towards the healthcare industry

Technology manufacturers play a key role as the reliable partner for healthcare providers trying to cope with the industry transformation. Paramount are a deep understanding of the entire continuum of care, a comprehensive portfolio covering prevention, diagnosis, and therapy, as well as the size and financial power to share entrepreneurial risks to make healthcare providers succeed in enabling better outcomes at lower costs.

Find more information in Siemens Healthineers Trend Book 2017 – Transforming Healthcare.

The Perplexing Psychology Of Saving For Health Care

Critics have long faulted U.S. medical education for being hidebound, imperious and out of touch with modern health-care needs. The core structure of medical school—two years of basic science followed by two years of clinical work—has been in place since 1910.

Now a wave of innovation is sweeping through medical schools, much of it aimed at producing young doctors who are better prepared to meet the demands of the nation’s changing health-care system.

Spending your own money on health care might mean that you’ll be more frugal with it. That’s the theory behind health savings accounts, a decades-old GOP concept that’s sparking renewed interest on Capitol Hill as Republican lawmakers look for ways to replace the Affordable Care Act.

HSAs are like personal savings accounts — with a difference. As with a retirement account, money put into an HSA can be invested, and any growth in the fund accumulates tax-free. Withdrawals can be made at any time, and they are tax-free, too — but the money can be used only to pay for certain medical expenses, such as health insurance deductibles, or for copays for hospital care or a visit to the doctor.

Currently, HSAs are only available to people who have high-deductible health plans, meaning they usually pay a few thousand dollars for medical care each year before their insurance kicks in to pay its share. While HSA participation is growing, only about 20 million people out of the 176 million who have health insurance participate in these savings accounts, according to a 2015 report by the Association of Health Insurance Plans.

Why don’t more people who are eligible for HSAs have them? For one thing, not everyone has money to contribute upfront. But psychologists and behavioral economists point out that even many people who have the extra cash on hand confront big psychological barriers to saving.

“How we think and feel is directly tied to our ability to make ‘good’ financial decisions,” says Alycia DeGraff, a board member and secretary of the Financial Therapy Association. DeGraff says when faced with financial decisions about the future, many people simply get stressed out.

“These stressors can become so overwhelming that … we can become debilitated and ignore the situation altogether,” she says. “Or we can practice any kind of defense mechanism — entitlement, suppression, overcompensation, isolation, etc. — to try and deal with [it].”

This may explain, at least in part, why middle-class Americans are pretty bad at saving money in general. Only about half of us have money in any sort of retirement account. And those of us who are parents have only saved, on average, enough to pay for about one year at an in-state college for our kids.

Saving money is hard. It means setting aside what we want now for something we think we’ll want or need later. And we live in a culture that offers a lot of pretty, shiny, things to buy RIGHT NOW.

Plus, we all pretend we won’t get old or sick.

“People are predictably irrational,” says Dr. Mitesh Patel, especially when it comes to money. He’s a behavioral economist, physician and assistant professor at the University of Pennsylvania’s Perelman School of Medicine.

But many of us really hate to lose money, Patel says, which is what makes the concept of HSAs is so appealing.

For example, he and his colleagues published a study last year in the Annals of Internal Medicine on what motivates people to lose weight, and found that the way a financial incentive was framed made all the difference.

The researchers observed three groups of people for 13 weeks. They told one group to walk 7,000 steps a day. About 30 percent of the group did so.Meanwhile, people assigned to the second group were told they’d be paid $1.40 every day they walked 7,000 steps. About 35 percent of the second group did so.

Here’s the kicker: Each person in the third group was paid $42 upfront and was docked $1.40 each time they failed to meet their goal. Forty-five percent of that group met the assigned goal, Patel says. People hate to lose money.

Another way to encourage more saving might be to make HSAs operate more like the 401(k)s that required people who didn’t want to participate to actively opt out of the plan — rather than requiring people who want to contribute to opt in. “This creates a path of least resistance,” Patel says.

Of course, setting up and overseeing such a plan would likely cost the government some money, he notes.

People with HSAs do use less health care than those without such plans, a recent study from the Employee Benefits Research Institute suggests. But it’s unclear whether they actually improve their health. Prescription drug costs went down for people enrolled in HSAs in the EBRI study, but emergency room visits went up — particularly for lower-income families.

Then there’s the issue of figuring out how much you, as an individual or a family, would need to save for health care — it’s not easy to find out the average price for a medical test or procedure in your town, let alone how much that price varies from doctor to doctor or hospital to hospital.

“If you want to save for a house, you can pretty much figure out the math,” Patel says. “But if you go to a doctor, they don’t give you a menu for prices.”

To really increase their health savings — or any savings — we’d all need to change our mindset, says Degraff, the financial therapist.

“People would have to first take a dose of reality and get real about their future selves,” she says. Naturally, we think our future selves will be “better, healthier, more financially secure,” she adds. But, for many of us, health and income eventually decline with age. We need to save more now for later.

HSAs can be useful, Degraff notes, but only for those who have enough cash to pay their day-to-day expenses — plus a little left over.

“A lot of people don’t even have a regular emergency fund savings,” DeGraff says, “especially those that are already struggling to pay for health insurance.”

The opportunities and challenges of AI in health care

Critics have long faulted U.S. medical education for being hidebound, imperious and out of touch with modern health-care needs. The core structure of medical school—two years of basic science followed by two years of clinical work—has been in place since 1910.

Now a wave of innovation is sweeping through medical schools, much of it aimed at producing young doctors who are better prepared to meet the demands of the nation’s changing health-care system.

When we asked dozens of venture capitalists where they see the most potential for applied artificial intelligence, they unanimously agreed on health care. Technology has already been used to incrementally improve patient medical records, care delivery, diagnostic accuracy, and drug development, but with AI we could achieve exponential breakthroughs.

Deep learning first caught the media’s attention when a team from the lab of Geoffrey Hinton at the University of Toronto won a Merck drug discovery competition despite having no experience with molecular biology and pharmaceutical development. Recently, a multidisciplinary research team at Stanford’s School of Medicine comprised of pathologists, biomedical engineers, geneticists, and computer scientists developed deep learning algorithms that diagnose lung cancer more accurately than human pathologists.

The ultimate dream in health care is to eradicate disease entirely. This dream might be possible one day with the assistance of AI, but we have a very, very long way to go.

Innovation is challenged by risk aversion and digitization

“Health care as a system advocates ‘do no harm’ first and foremost. Not ‘do good,’ but ‘do no harm.’ Every application of AI in healthcare is regulated by that fundamental philosophy,” cautions Kapila Ratnam, a scientist turned venture partner at NewSpring Capital. Additionally, Lisa Suennen, managing director at GE Ventures, highlights that “the single biggest contribution to excess cost and error in healthcare is inertia.” The attitude of “this is how it’s always been done” is literally killing people.

Other investors agree that the ultraconservatism in the health care system, while intended to protect patients, also harms them by restricting innovation. Gavin Teo, partner at B Capital Group and a specialist in digital health, cites “provider conservatism and unwillingness to risk new technology that does not provide immediate fee-for-service (FFS) revenue” as a major challenge for startups tackling health care. Teo also points out that the industry feels burned from recent experiences, such as “electronic medical records (EMR) digitization regulations, which were overhyped and resisted.”

There are many well-known challenges to implementing machine learning and AI in health care. The first is the lack of “curated data sets,” which are required to train AI via supervised learning. “Curated data sets that are robust and have both the breadth and depth for training in a particular application are essential, but frequently hard to access due to privacy concerns, record identification concerns, and HIPAA,” explains Dr. Robert Mittendorff of Norwest Venture Partners.

Summerpal Kahlon, MD, is director of care innovation at Oracle Health Sciences. He’s seen many of these data challenges firsthand in delivering technological infrastructure to support individualized care. “Adverse drug events cause around 770,000 injuries and deaths annually in the U.S. and cost each hospital up to $5.6 million annually,” Kahlon discloses, “but drug data is messy, coming from multiple sources in multiple formats. Additionally, genetic data in support of pharmacogenomics is not available at scale yet.”

Fixing accidental hospital infections and performing rare disease detection with AI also requires better data than is currently available. According to Kahlon, the genetic and behavioral data required for rare disease studies are not “well-defined nor easily captured,” while “much of the information relating to the risk factors for hospital-acquired infections is kept in unstructured notes in the chart, including in flowsheets and clinical notes.”

While data problems in health care abound, another major challenge is designing technical solutions that can be smoothly implemented and integrated into clinician practices and patient care. “Behavioral change is the blockbuster drug of digital health,” claims Dr. Mittendorff, but changing habits is much easier said than done. The wrong solution or rollout can even harm the health care industry.

Implementing and integrating technology has indeed been a burden for many clinicians and practitioners. Dr. Jose I. Almeida is a pioneer in endovascular venous surgery who has practiced for over 20 years. He adopted electronic health records (EHR) ahead of the curve, yet has not seen many of the promised benefits. “We implemented our first EMR System eight years ago hoping it would improve efficiencies. We are now on our fourth system, and remain disappointed,” complains Dr. Almeida. “Right now, it’s been more of a hassle than a time-saver, and has actually disrupted the doctor/patient relationship by forcing a screen between physicians and their patients.”

Leonard D’Avolio, founder of Cyft, has harsh feedback for fellow entrepreneurs trying to tackle the space: “We’re seeing hospital after hospital take incredible loss and have widespread layoffs simply from the challenge of implementing electronic health records. Imagine what happens if you then show up and say ‘I have artificial intelligence’.”

The health care industry is just getting its arms around capturing data digitally, yet many tech entrepreneurs mistakenly believe that creating a dashboard or dropping in a product will somehow lead to adoption of technology and improve operations. “There’s a huge misconception that AI requires huge amounts of data, but that’s not the real issue in health care. The real issue is understanding the context into which you are trying to introduce these technology,” warns D’Avolio. “You need context and a deep understanding of who will use this. What workflows will be introduced?”

Even if a medical provider does successfully digitize their data, technical carelessness can introduce problems for everyone in the system. According to Ratnam of NewSpring, “A credit card record costs about 10 cents on the black market. A medical record costs about $200. Medical data is so valuable that hackers constantly seek ways to break into provider or payment systems and other repositories of medical data.”

There is often tension between a venture-backed company, which aims for fast growth, and the health care system, which challenges scale because of environmental complexity and unavoidable hand-holding.

“This lesson has not been widely learned,” observes D’Avolio.

…But opportunities abound and solutions exist

Despite challenges, innovation in health care must continue. According to Teo of B Capital, “A study by the Association of American Medical Colleges estimates that by 2025 there will be a shortfall of between 14,900 and 35,600 primary care physicians.” At the same time, the population is aging and in need of more medical attention.

Thus, inaction and failure to innovate may lead to doing harm.

Luckily, many companies strive to address these issues before they come to pass. CB Insights recently profiled 106 different artificial intelligence startups in health care tackling the various challenges in the space, ranging from patient monitoring to hospital operations.

Teo identifies AI powered chatbots and virtual assistants as one way to “alleviate supply constraints by widening the reach of video telehealth options. In this case, diagnosis can be powered by machine learning and then trained by artificial intelligence.” Examples of companies providing clinician assistant and care delivery services include Babylon Health, Evidation Health, Sensely, and Seniorlink.

Artificial intelligence can not only improve care delivery, but also assist in clinician decision-making and operational efficiency, amplifying the impact of each individual practitioner. AnalyticsMD employs AI and machine learning (ML) to streamline hospital operations in emergency rooms, operating rooms, and inpatient wards, while predictive companies like Cyft and HealthReveal analyze disparate data sources to accurately triage and apply interventions to the highest risk patients.

AI helps not only physicians, but also patients. A study by the Mayo Clinic determined that 50 percent of patients have difficulty with medication adherence. Companies like AI Cure employ computer vision techniques to enable smartphones to recognize faces and medications, lowering the cost and improving the effectiveness of tracking and adherence programs. According to Dr. Mittendorff, “AI enabled coaching will allow a provider or coach to manage more than 1,000 patients simultaneously rather than 50-100, a 10x increase in labor leverage.”

Finally, drug discovery companies like NuMedii and Kyan Therapeutics reduce risk in the drug development process, enabling “powerful and proprietary new combination therapies, as well as individualized treatment with unprecedented efficacy and safety,” according to Teo. Otherwise, Suennen points out that the “general spend for each drug brought to market is $2.5 billion.”

Even technology challenges that come with digitizations can be mitigated by AI. Remember how valuable medical records are to hackers? Many of these records are pilfered through social engineering methods, such as phishing or fraudulent phone calls. Protenus is a health care security company that applies AI to analyze enterprise-wide access logs and flag suspicious cases for administrator review.

Aligning with policy and revenue is a key to success

The key to adoption of health care IT is to identify the correct point of entry and fit these systems seamlessly into existing workflows. D’Avolio of Cyft has spent over 12 years fitting ML into the health care system, yet when he speaks at conferences for clinicians, he avoids using the words “artificial intelligence” or “machine learning” and instead focuses on real impact and benefits.

Many patients with chronic diseases like diabetes visit doctors and hospitals numerous times, costing themselves, insurance providers, and the medical system a substantial amount of money. Cyft builds sophisticated models that identify patients with a preventable readmission and matches them to appropriate intervention programs. Traditionally, these decisions are made by looking at 7 to 10 administrative variables, but Cyft’s model looks at over 400 data sources, ranging from free-text input from nurses to call center data. While adoption of such technologies may seem complicated, D’Avolio gets buy-in by strategically aligning with revenue incentives and policy decisions.

“In healthcare, policy eats strategy and culture for breakfast,” explains D’Avolio. “For example, prior to [when] the American Recovery and Reinvestment Act passed in 2009, the rate of adoption of electronic health records was under 9%. Today, thanks to the carrot and stick incentives involved in that act the rate of adoption is > 90%.” Another major policy shift that has dramatically helped investment in health care IT is the value-based care experiments (also called demonstration programs) funded by the Center for Medicare & Medicaid Innovation (CMMI).

Knowing which policy an organization is incentivized or paid by is key to identifying promising customers. According to D’Avolio, “Organizations that get paid mostly from seeing more patients will want AI that helps deliver more complex care faster. Organizations that are paid via value-based programs will seek technology that keep patients healthier at lower cost.”

Suennen of GE Ventures agrees that operational analytics can dramatically improve health systems: “25 percent of the more than $7 billion spent each year on knee and hip surgeries are impacted by bundled payments initiatives. Determining how to manage these bundles is challenging, and advanced technologies can aid in understanding what changes must be made across the board in operations and financial/clinical management to ensure that health systems can respond.”

Teo is also excited by policy changes that should drive forward health care innovation. “New reimbursement driven by the Medicare Access and CHIP Reauthorization Act (MACRA) and the Merit-based Incentive Payment System (MIPS) incentives in 2017 will drive quality outcomes, phasing providers to think more holistically when investing in technology.” Additionally, he believes that a looser FDA in the coming years will help drive investment in personalized medicine.

Successful health care innovation will only happen with strong collaboration between entrepreneurs, investors, health care providers, patients, and policy developers. If the stars align, humanity stands to derive enormous benefit from the application of AI and inch closer to our dream of perfect health and a world without disease.

This article appeared originally at TopBots.

8 Technologies Poised to Disrupt US Healthcare in 2017 and Beyond

Critics have long faulted U.S. medical education for being hidebound, imperious and out of touch with modern health-care needs. The core structure of medical school—two years of basic science followed by two years of clinical work—has been in place since 1910.

Now a wave of innovation is sweeping through medical schools, much of it aimed at producing young doctors who are better prepared to meet the demands of the nation’s changing health-care system.

The future of healthcare is happening right now. While that future is just barely forming, we are beginning to see how technology is now scratching the surface of an entirely different landscape when it comes to healthcare delivery both within and outside of the U.S.

According to PwC Health Research Institute’s annual report, 2017 is the year to prepare for the arrival of several technologies poised to disrupt the industry. This myriad of tech-driven innovation will impact just about everything from supply chain and operations to business models and essential healthcare management practices and procedures. Here’s a look at report’s eight proposed technologies poised with the potential to change it all:

1. Artificial Intelligence (AI)

We are already witnessing the potential of artificial intelligence (AI) in healthcare through IBM’s Watson, a supercomputer that first impressed us by beating Jeopardy opponents but is now tasked with beating a jeopardy of a different kind—cancer. Watson can identify cancer mutations by comparing it to a host of resources, including medical literature and clinical studies.

AI’s potential seems to be limitless. As Watson’s ability to decipher and recognize information from a myriad of media continues to grow, it will become one of the most powerful tools for data analytics moving forward. It’s expected that intelligent CDS systems using AI will further emerge to help doctors diagnose and effectively treat diseases.

Of course, the potential doesn’t stop there. It’s possible that AI will find itself into everything from wellness apps and wearables to customer service bots for patients. However, AI isn’t ready to diagnose or service patients on its own just yet.

2. Augmented Reality (AR)

Not to be confused with the computer-created world known as virtual reality (VR), augmented reality (AR) is a blending of both VR and the real world: think Pokémon Go. Aside from capturing fictitious characters, the potential of AR is undeniable in healthcare. In the future, AR could be built into medical devices or assistive devices like Google Glass, which has already been used in the OR for education purposes and shows promise as a telemedicine tool.

AR has the potential to take gamification to the next level via applications that assist in health management, medication adherence or incentivized wellness plans. Its ability to attract and engage patients will make it a potential component for dispelling information. According to an article from Medicalfuturist, pharmaceutical companies are developing applications using AR to explain how drugs work within the human body as well as how chronic, long-term conditions impact the body over time.

The article also explains how AR will give us visual overlays that make healthcare delivery more efficient and easier to access. For example, AR has already saved lives by allowing smartphone users to locate medical defibrillators through the use of an app called AED4EU. AR is also expected to show up as a precision tool at the point of care, whether it’s helping nurses find veins easier for blood draws or assisting surgeons in the OR.

3. Blockchain

Blockchain is being hailed as the next frontier in healthcare that will likely assist in resolving some of the industry’s challenges with interoperability, but what is it? Emerging in 2009 as the foundation for trading the digital currency bitcoin, blockchain is a permanent record of online transactions and exchanges that can be shared among network computers. Instead of a centrally located database, the online ledger is distributed to networks; each transaction is secured via cryptography and has to be approved and verified by those networks.

The exponential growth of blockchain applications could create the privacy and security that the industry has been looking for when it comes to managing data from hospitals, doctors, and insurance companies. That data includes information from electronic health records (EHRs), monitoring systems and IoT (internet of things) devices. Blockchain’s function could greatly enhance the integration of telemedicine and population health management (PHM) practices in healthcare. However, most blockchain technology is still in the early stages of development and not ready for mainstream deployment in healthcare, according to article published by Tierion.

4. Drones

It goes without saying, drones literally have the potential to deliver life-saving care to those who desperately need it. In fact, they are already doing just that by providing medications, vaccinations and supplies to remote populations in other countries. For example, Matternet, a leading drone company in Silicon Valley, has already enabled the delivery of life-saving drugs to Rwanda.

Beyond helping isolated populations, drones have the potential to replace transport services for drugs, light-weight medical devices and even organs. In October, it was reported that drones would be tested in remotes areas of Australia for organ transport. Drones could also be used to travel shorter lengths delivering samples within large hospital campuses.

Right now, the challenges of drone use seem to stand in the way its potential, including flight restrictions and functional problems such as battery life, the weight of transport, etc. While drones look to impress us heading forward, don’t expect to look up and see that potential come to life just yet.

5. Internet of Things (IoT)

Some may refer to the internet of things (IoT) as the internet of everything or when we talk specifically about healthcare, the internet of medical things (IoMT). What IoT describes is a steady state of interconnectivity and data stream among devices. The potential of IOT in healthcare is undeniable as the market is poised to hit $117 billion by 2020, according to a previous report from Market Research.com

From remote patient monitoring and care coordination to inventory supply and digital supply chain, IoT could greatly enhance key areas in healthcare. Its greatest potential lies in its promise to deliver on creating personalized healthcare. Connectivity among devices could help support the integration of wearables and remote monitoring devices in the growth of remote care management and telemedicine practices. However, efforts toward building supports for interoperability will be a critical indicator of IoT’s growth in healthcare.

6. Robots

When it comes to robots in tomorrow’s healthcare setting, you might want to think small—incredibly small. Aside from robots’ integration in supply chain and remote patient monitoring, we are likely to see the advent of nanotechnology and nanorobots come to life over the next several years. Ingestibles and internables will come into greater use to help monitor, manage and prevent an array of conditions and diseases; Smart pills, for example, could help monitor a patient’s internal reactions to medications.

According to CIO and the report “Healthcare Robotics 2015-2020: Trends, Opportunities & Challenges”, we are likely to see the value of robotics in three main areas in healthcare:

· Direct patient care: surgical robots (used for performing clinical procedures), exoskeletons (for bionic extensions of self like the Ekso suit), and prosthetics.

· Indirect patient care: pharmacy robots (streamlining automation, autonomous robots for inventory control reducing labor costs), delivery robots (providing medical goods throughout a hospital autonomously), and disinfection robots (interacting with people with known infectious diseases such as healthcare-associated infections or HAIs).

· Home healthcare: robotic telepresence solutions (addressing the aging population with robotic assistance).

7. Virtual Reality (VR)

Virtual Reality’s potential to disrupt healthcare is already unfolding. In April 2016, the first operation using a virtual reality camera was performed in London. It was streamed live, allowing medical students, trainee surgeons, and members of the public to experience the procedure in real time. We are expected to see its use as a teaching tool continue to grow.

Similarly, we are likely to see VR applied as a means to promote behavioral health services, whether it’s by relaxing patients and making them feel at home during their hospital stay or increasing the recovery from a stroke by helping patients “practice” how to lift their arms or move their fingers through the technology.

Physicians may also use the devices to understand the experiences of their patients better. For example, a project known as “We are Alfred” from Embodied labs provides physicians with the experience of what it’s like to be an elderly individual. Meanwhile, the development of simulated surgeries for patients using VR may help put them more at ease when it comes to going under the knife. Perhaps, this tech-enabled reality could help providers and patients better understand each other in ways the real world never could.

8. 3D Printing

According to a market research report by IndustryARC, the 3D-printing healthcare market is expected to grow by 18 percent annually until 2020. The healthcare industry has already seen significant growth in various areas thanks to 3D printing, including dental applications, medical implants, and drug manufacturing.

Many 3D-printing solutions are still in experimental stages, but the potential for its applications are looking quite promising. For example, at Princeton University they have developed 3D-printing tools to create a bionic ear, which can hear frequencies well beyond normal human range. This technology’s reasonable price points make the possibilities of 3D printing not only endless but cost effective. Shortly, we may be printing just about everything, from pills and prosthesis to biologically engineered replacement parts and organs.